TPI Composites posts Q3 profit, adjusts forecast

Image source: Wood Group

November 8 (Renewables Now) - After reporting a net loss in April-June 2018, US composite wind blades maker TPI Composites Inc (NASDAQ:TPIC) posted a third-quarter (Q3) profit on Wednesday and made some adjustments to its forecasts.

The company reported a net profit of USD 9.5 million (EUR 8.3m) for July-September 2018. While it stood against a loss of USD 4.1 million for the prior quarter, the result more than halved from the USD-21.7-million profit in July-September 2017.

Net sales went up by 0.6% year-on-year to USD 255 million, with net sales of wind blades decreasing to USD 234.9 million from USD 238 million. The decline is attributed to a 19.1% drop in the number of produced wind blades primarily as a result of the increase in lines in transition, the lost volume from two expired contracts, a delayed customer startup and foreign currency fluctuations.

Total billings went down by 6.1% to USD 240.7 million.

“We delivered solid operational and financial performance in the third quarter in which we exceeded our Adjusted EBITDA target,” commented Steven Lockard, TPI Composites’ president and CEO.

More details on TPI’s financial performance are available in the following table.

Figures in USD (except percentages)

Q3 2018

Q3 2017

9-mo 2018

9-mo 2017

Net sales

255m

253.5m

739.6m

701.7m

EBITDA

7.4m

26.9m

38.5m

64.3m

EBITDA margin (%)

2.9

10.6

--

--

Adj EBITDA

17.6m

27.9m

58.4m

71.7m

Adj EBITDA margin (%)

6.9

11

--

--

Net profit

9.5m

21.7m

14.1m

36.5m

Net profit per fully diluted share

0.26

0.62

0.39

1.05

TPI made some changes to its existing forecasts for 2018 and 2019, and also set preliminary 2020 targets for net sales and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA). More details are available in the table below.

Figures in USD (except num. of lines)

2018

2019

2020

Net sales

1bn-1.05bn

1.5n-1.6bn*

1.7n-1.9bn*

Total billings

1bn-1.05bn

Adj EBITDA

65m-70m

120m-130m

170m-190m

Fully diluted earnings per share

0.32-0.39

1.24-1.35

N/A

Dedicated manufacturing lines at year end

51-55

62-65

N/A

Capital expenditures

85m-90m

95m-100m

N/A

*The company gives a combined value for net sales and total billings for 2019 and 2020.

CEO Lockard blamed the reduction of the 2019 adjusted EBITDA guidance on the company’s updated forecast of eight more lines in transition and nine more lines in startup during 2019 compared to its original forecast.

“We believe these additional investments in increased startups and transitions position us well for our goal of doubling our wind related sales by 2021,” he said.